The Use and Effectiveness of Macroprudential Policies: New Evidence

Eugenio Cerutti, Stijn Claessens () and Luc Laeven

No 2015/061, IMF Working Papers from International Monetary Fund

Abstract: Using a recent IMF survey and expanding on previous studies, we document the use of macroprudential policies for 119 countries over the 2000-13 period, covering many instruments. Emerging economies use macroprudential policies most frequently, especially foreign exchange related ones, while advanced countries use borrower-based policies more. Usage is generally associated with lower growth in credit, notably in household credit. Effects are less in financially more developed and open economies, however, and usage comes with greater cross-border borrowing, suggesting some avoidance. And while macroprudential policies can help manage financial cycles, they work less well in busts.

Keywords: WP; open economy; foreign currency; exchange rate; standard deviation; capital account; credit growth; dependent variable; regression result; Macroprudential policies; Effectiveness; Procyclicality; Financial cycles; prudential policy; MPI index; Macroprudential policy; Credit; Housing prices; Emerging and frontier financial markets; Central bank policy rate; Global (search for similar items in EconPapers)
Pages: 43
Date: 2015-03-17
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Citations: View citations in EconPapers (198)

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Journal Article: The use and effectiveness of macroprudential policies: New evidence (2017)
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